Western Cape properties still growing in value, but at a lower rate

PROPERTIES in the Western Cape are appreciating in value by 7.6% a year which, although lower than before, is more than double the national average.

Analysis from Lightstone has shown that, as at the end of December 2018, the national house-price inflation index was at 3%.

The market has been ranging in the 2% to 5% zone for some time following a slowing down in recent months, says Lightstone analytics director PaulRoux de Kock. But this is changing as more provinces – Mpumalanga, Limpopo and the Northern Cape – start to break above this range.

“The Western Cape still outperforms the rest of the provinces with an annual rate of 7.6%, despite a drop of about 3 percentage points in the past year.

“The municipalities Ekurhuleni, City of Tshwane and City of Johannesburg metros are growing stably at rates between 2% and 5%, and the coastal municipalities are generally performing above this range.”

De Kock says low and mid-value wealth segments of the market continue to buck the trend by growing at more than 4% annually while the rest are inflating at rates below 3%. Lowvalue properties are those valued at less than R250 000, while mid-value homes are valued at R250000 to R700000.

The luxury property segment (above R1.5 million) has been the worst performer with growth rates of 0.2% at the end of 2018, while highvalue homes (R700 000 to R1.5m) have been following the national inflation trend, ending last year at 2.8%.

Mid-value properties have been increasing in value since September 2016 and ended last year with the best inflation rate of 5.6%. Yet while low-value properties saw the second highest inflation levels at 4.4%, these values have been steadily dropping since December 2016, when they peaked at 14.6%.

Furthermore, Lightstone’s data shows that, since September 2015, annual inflation of both freehold and sectional title homes has been declining. As at December 2018, the inflation rates for freehold were about 2.9% and

sectional title 2.7%.

PROVINCIAL INFLATION RATES AS AT THE END OF 2018:

Western Cape 7.6%

Limpopo 6.3%

Eastern Cape 5.3%

Northern Cape 5.1%

Mpumalanga 5.1%

KwaZulu-Natal 4.1%

North West 2.8%

Gauteng 2.6%

Free State 2.1% ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ MUNICIPAL INFLATION RATES AS AT THE END OF 2018:

City of Cape Town 7.1%

City of Johannesburg 2.4%

City of Tshwane 3%

Ekurhuleni 2.7% eThekwini 4.6%

Nelson Mandela Bay 6.8% ¡ ¡ ¡ ¡ ¡ ¡

PAUL BRENNAN RATES Lightstone analyses its data.| PICTURE: